Popular sweepstakes casino, Stake.us, is facing a fresh lawsuit in the Golden State, with plaintiff Dennis Boyle framing the platform as an “illegal gambling website”.
Boyle, who claims to suffer from a gambling addiction, filed in Orange County, California; he argued that Sweepsteaks Limited – the Stake.us parent company – is running an “illegal gimmick” comparable to the sweepstakes cafes of the early 2000s.
His suit went on to say that playing at this sweeps site is tantamount to gambling and therefore violates California law. He also called out the 3x playthrough requirement on ‘Stake Cash’, framing it as a system which “stacks the odds heavily in Defendants’ favor”.
The Sweepstakes System
Sweepstakes casinos are different from traditional online casinos, as players use currencies like Gold Coins and Sweeps Coins to play games, instead of real cash. Stake.us uses the term ‘Stake Cash’ instead of Sweeps Coins, but the effect is the same – this currency is redeemable for real money, once any playthrough requirements are fulfilled.
However, Stake Cash is given away for free as part of certain bonuses and purchases, not bought, and this is the mechanism by which sweeps casinos argue for their legality. Their system avoids the typical concept of consideration found in traditional gambling, where a player uses real money to participate in a game of chance. However, critics argue sweepstakes casinos are simply exploiting a legal loophole and are offering gambling services in all but name.
An International Operation
A little background: Sweepsteaks Limited is headquartered in Cyprus, known for its laws which favor international online gambling operations, particularly those that operate under a sweepstakes model.
That said, Stake’s owners are Australian entrepreneurs, Ed Craven and Bijan Tehrani. They co-founded the platform in 2017, and it’s quickly grown to become one of the largest global iGaming brands, often operating on the edge of the law. Stake has a traditional gambling presence in many countries, but in the US, the platform is tailored specifically to the sweepstakes format to work within local laws.
Plaintiff Engaged in Two Lawsuits
After Boyle initially filed the suit against Sweepsteaks Limited in Orange County, Stake countered with a Notice of Removal to transfer from state court to federal court – this venue tends to favor defendants, as there can be higher barriers to success for plaintiffs there. So currently, the case still sits at the federal level, while Boyle argues it should be moved back to the state court.
In fact, it’s not the only lawsuit Boyle has against a sweepstakes casino; he’s taking the same action against Yellow Social Interactive, which operates Pulsz, a very similar enterprise. In that case, Boyle has made the same arguments, and things have run the same course so far; a District Court Judge recently denied Boyle’s motion to remand back to the State Court, meaning this one also remains at the federal level for now.
Numerous Ongoing Cases
Boyle’s cases are two of multiple current suits involving sweepstakes casinos in the US. The vertical has seen a massive rise in popularity in recent years, but still exists in something of a grey area, with no firm judgment for or against the format yet to materialize.
Stake recently signalled its willingness to cooperate with potential new state laws when it withdrew from multiple US states.
Whether Dennis Boyle will manage to persuade the courts that Stake’s and Pulsz’s operations are illegal remains to be seen, but we’ll keep you updated either way.
Author: Joseph Allen
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